When is a slowdown almost good news? Answer: when your slowdown still makes you better than the rest.
The recently released Manpower Employment Outlook Survey for the third quarter of 2011 continues to reinforce a pattern we are witnessing across a slew of other economic indicators.
While India's performance on the jobs front relative to the rest of the world remains praiseworthy, in comparison with its own past performance, the economy is showing signs of slowing.
Manpower, a human resources firm, found India to be the most positive in terms of hiring plans among the 39 countries surveyed. India's Net Employment Outlook, measured as the percentage of companies looking to hire, minus those that are looking to downsize, is at a healthy 47% as per seasonally unadjusted numbers (ie, that do not take seasonal variations into account).
That the next best performers, Taiwan and Brazil, are at a somewhat distant second and third at 39% and 37%, puts India's numbers into perspective. China also compares rather unfavourably, according to this parameter, at a net outlook of only 19%.
Developed economies like Germany, USA, France, Japan and UK are much less positive about hiring, and South Africa is actually quite pessimistic, with the percentage of companies looking to hire is less than the percentage of those that expect a decrease. Ireland, Italy, and Spain are three other countries looking to downsize on a net basis as well
But India's outlook has dulled mildly compared with the previous quarter, when it was at a more robust 49%. If we look at seasonally adjusted numbers, the figures have declined even more at 46% for the third quarter from 51% in the second quarter.
This softening in its own performance, however, should not come as a surprise considering recent trends in India's economic activity. Indicators such as industrial production have been softening for some time now.
Persistent inflation and continued hikes in interest rates are also expected to hurt growth going forward. The Organisation of Economic Cooperation and Development (OECD)'s monthly leading index has shown a softening growth trend for the last three consecutive months.